The Patient-to-Prisoner Pipeline: The IMD Exclusion's Adverse Impact on Mass Incarceration in United States

Abstract

A component of the 1965 Medicaid Act, the Institutions for Mental Diseases (“IMD”) Exclusion was supposed to be a remedy for the brutal, dysfunctional mental healthcare system run through state hospitals. In the years since Medicaid was created, the IMD Exclusion has instead barred thousands of those in need of intensive, inpatient treatment from receiving it. As a result, many severely mentally ill individuals are left without adequate care and without a home. They struggle in the street where they are otherized by those in their community and are susceptible to confrontational episodes with law enforcement. Many are ultimately incarcerated, where they are thrust into an abusive environment known to exacerbate mental health issues.

This Note's central contention is that the IMD Exclusion creates an access gap for the poorest Americans who suffer from mental illness. Subsequently, prisons and jails fill that gap to the detriment of those individuals. The Note will proceed first by explaining the IMD Exclusion and how it applies to state-run medical care services and facilities. This Note will discuss the nationwide movement, in the 1950s through the 1960s and ‘70s, to deinstitutionalize notoriously abusive state psychiatric hospitals, a movement that culminated in the passage of the Medicaid Act in 1965, along with the IMD Exclusion. This Note will then shift focus to criticize the practical effects of the IMD Exclusion and its extensive role in the mass incarceration issue today. In doing so, this Note will identify the major weaknesses of the IMD Exclusion and explain how these weaknesses create an access gap for mentally ill persons, while simultaneously making them more vulnerable to contact with the police and the criminal justice system.

I. INTRODUCTION

Massachusetts Avenue in Boston's Fenway neighborhood operates as a conduit for the city's forgotten. On any given day, several homeless persons will be begging for change, food, or anything potential patrons can afford. Some of these individuals are very mentally ill. In one instance, a bundled, older, Black woman will yell out to pedestrians, wishing them a great day from the bottom of her heart. Minutes later, she might lash out at passersby, spitting furiously as she yells that she does not give a damn about you or your dog or that Berklee student's saxophone. One day, that woman may be out on Massachusetts Avenue for hours; the next day, she will likely disappear. Local residents and regular commuters may take notice, but no one acknowledges it aloud. No one knows for sure where she went, nor do they necessarily care to know. Today, odds are that this woman was hauled into jail by authorities.¹

The United States has a serious, underreported mental healthcare crisis, fueled by law and policy strongly encouraging mental healthcare providers and state governments to make choices driven by financial concerns instead of patient needs.² A long-standing provision in the Medicaid Act of 1965 lies at the heart of this issue. Known as the Institutions for Mental Diseases (“IMD”) Exclusion, this provision prohibits federal contribution to mental health treatment for individuals ages 21-65, in a class of facilities termed as “institutions of mental disease.” Such facilities are defined as “a hospital, a nursing facility, or any other institution of more than 16 beds … primarily engaged in providing diagnosis, treatment or care of persons with mental diseases, including medical services, nursing care or related services.”³ Intended to incite new, smaller, state-created approaches to mental healthcare, the IMD Exclusion generates more problems than it does solutions. Low-income, mentally ill persons are being removed from state hospitals and placed in private facilities that are understaffed, undertrained, and ill-equipped to effectively treat psychiatric patients.⁴

This crisis also intersects mental health issues with another dilemma of national interest: mass incarceration. In 2012, the United States imprisoned 356,268 persons with severe mental illness in jails and prisons.⁵ In the same year, state hospitals across the country collectively held a mere 35,000 psychiatric beds, down from 558,922 beds in 1955.⁶ More recent reports reveal that 47 states were incarcerating vastly more people with a mental disorder than they were treating in a public hospital.⁷ While some of these inmates have committed serious offenses, many are guilty of very low-level or trivial crimes – trespassing, disorderly conduct, public urination, and possession of small amounts of illegal substances.⁸

Ultimately, all of these affected individuals suffer from is a lack of care. Harsh conditions of confinement, like solitary segregation, compound already-existing mental disorders in inmates and may precipitate new ones.⁹ Additionally, inmates often face high barriers when attempting to access medicine and treatment.¹⁰ On top of this, inmates sexually assault, physically dominate and verbally harass each other; corrections officers are guilty of committing these transgressions as well.¹¹ The prison and jail environments exacerbate the severity of mental disease, spurs extreme depression and increases the tendency to commit suicide. Accordingly, the existing Medicaid system transforms the mental health crisis into a criminal justice issue as well.

This Note will analyze the twin effects of the IMD Exclusion provision in the Medicaid Act on the public mental healthcare system and on the criminal justice system in the United States. This Note's central argument is that the IMD Exclusion creates an access gap for the poorest Americans who suffer from mental illness, and prisons and jails fill that gap to the detriment of those individuals. What results can only be described as a “patient-to-prisoner pipeline” – the expulsion and preclusion of vulnerable, mentally ill people from treatment facilities and their subsequent funneling into the criminal justice system. This Note will proceed by first explaining the IMD Exclusion and how it applies to state-run medical care services and facilities. This Note will discuss the nationwide movement, in the 1950s through the 1960s and ‘70s, to deinstitutionalize notoriously abusive state psychiatric hospitals, which culminated in the passage of the Medicaid Act in 1965, along with the IMD Exclusion. This Note will then shift focus to criticize the practical effects of the IMD exclusion and explicate its extensive role in the mass incarceration issue today. In doing so, this Note will identify the major weaknesses of the IMD Exclusion and explain how these weaknesses create an access gap for mentally ill persons, while simultaneously making them more vulnerable to contact with the police and the criminal justice system.

This Note will also look at some of the systemic failings of local law enforcement when managing the mentally ill population that facilitate their frequent placement in jails and prison. Poor procedure, apathetic and uninformed law enforcement actors, and depleted mental health facilities in jails and prisons all serve as additional institutional barriers to proper care. Many of the mentally ill inmates in custody of jails and prisons today are very likely to end up there because of a lack of support or treatment for their illness.

This Note concludes by evaluating the most recent efforts to address the access gap caused by the IMD Exclusion and contemplate other legislative and policy solutions. In the past year, Congress has amended the Exclusion provision to extend federal coverage of acute psychiatric care for fifteen days a month in facilities that do not fall under the Exclusion.¹² This Note will state that while the amendment offers some flexibility to non-IMD-designated facilities to provide longer periods of treatment to patients, the Exclusion, as it currently exists, still stifles development of adequate mental healthcare facilities. Moreover, it does little to stem the large demographic of individuals who cannot be physically accommodated by existing facilities, exposing them to arrest and imprisonment, and likely worsening their condition.

The complexity and breadth of mental disease warrants defining the scope of the term “mental illness” in the context of this Note. This Note focuses specifically on the population of persons living by mental illness who are at least 18-years-old and either have: a serious mental disorder; substance use issues or; co-occurring mental and substance use issues. According to the Substance Abuse and Mental Health Services Administration (“SAMHSA”), serious mental illness is defined by federal government as, “at any time during the past year, a diagnosable mental, behavior, or emotional disorder that causes serious functional impairment that substantially interferes with or limits one or more major life activities.”¹³ SAMHSA defines a substance use disorder as one that occurs “when the recurrent use of alcohol and/or drugs causes clinically significant impairment, including health problems, disability, and failure to meet major responsibilities…”¹⁴ Serious mental health and substance use disorders are the most prevalent mental health issues facing Medicaid recipients. Although the public mental healthcare system will occasionally treat these issues separately, they are frequently co-related and occur concurrently in patients.

II. ORIGIN AND FEATURES OF THE IMD EXCLUSION: DEINSTITUTIONALIZATION AND THE CREATION OF MEDICAID

While the IMD Exclusion is poorly conceived and effectively facilitated the dramatic rise in the incarceration of the mentally ill, the provision was originally the lynchpin of an earnest movement to reform a deteriorating public mental healthcare system.¹⁵ This movement, known as “deinstitutionalization” represented a critical component to the U.S. government's evolving view on how to best provide treatment for low income Americans suffering from mental disease.¹⁶ Medical experts and politicians in favor of deinstitutionalization desired to shift several long-lasting features of the public mental health system.¹⁷ First, stakeholders wanted to transition the basic model for mental healthcare from a predominantly inpatient-centric service treating large populations to a more decentralized system of smaller, outpatient-centric service facilities.¹⁸ Second, proponents of deinstitutionalization wanted to shift the treatment venue from state hospitals to private community centers.¹⁹ Third, deinstitutionalization aimed to shift the source of government funding for low-income patient treatment from the states to the federal government.²⁰ Practically, deinstitutionalization was occurring prior to 1965; the Medicaid Act, specifically the IMD Exclusion, was the formal, legislative culmination of deinstitutionalization's goals.²¹

The first major psychiatric institutions were state asylums, which proliferated in the 19^th century.²² Asylums provided long-term mental healthcare. Before the advent of biomedical methods to psychiatric treatment, staff generally employed forms of moral treatment – a sensitive approach to treating mental health disorders through relaxing activities like reading and taking walks.²³ The existence of such humane treatments at the advent of institutionalized psychiatric care comes as surprise, especially in light of the rather arcane methods employed in the subsequent century.

Just prior to deinstitutionalization, many of the attendant defects that plagued mental health were analogous to the issues mentally ill persons face today, both in community-based health facilities and as a result of frequent jailing and imprisonment.²⁴ In the mid-twentieth century, the conditions and treatment regime of the asylums changed drastically. State facilities struggled to maintain staff that met the minimum requirements of adequate care set forth by the American Psychiatric Association (“APA”).²⁵ By 1958, only fifteen states had more than 50% of the requisite number of physicians deemed adequate by the APA to staff public mental facilities.²⁶ Other medical and treatment professionals also possessed sub-standard training: only 19.4% of nurses, 36.4% of social workers and 65% of psychologists met the APA's standards of quality, which medical experts already viewed as a compromise between optimal requirements for mental health care and the level of care determined to be realistically attainable.²⁷ Moral treatment was largely abandoned in a desperate attempt to deal with more severe instance of mental illness.²⁸ Psychosurgeries, or lobotomies, were frequently used to treat patients in the 1930s, 40s and early 50s, despite little to no scientific evidence supporting its effectiveness.²⁹ As this Note demonstrates later, current reform efforts to the mental health care system reiterate many of these same problems, indicating a serious defect in the letter, if not the spirit, of the IMD Exclusion.

National investment in industrialization and the American effort in World War II divested funding away from many asylums, subsequently compounding these issues during the 1940s.³⁰ In sum, asylums became understaffed and overcrowded; in turn, staff were undertrained and inexperienced in mental healthcare.³¹ These are central issues that, as demonstrated later in this Note, continue to plague American public mental healthcare under the guise of different venues and systems.

As a consequence of the systemic shortages in the state asylums, mental health patients suffered immensely. Poor hygiene and conditions became invidious staples of public psychiatric institutions.³² Patients were substantially deprived of their civil rights and frequently abused by staff.³³ A rash of misdiagnoses by doctors and psychiatric professionals led low-income patients, with a marginal understanding of the healthcare system, to be admitted to state facilities, where a mental health staff with marginal experience managed them.³⁴ Notably, deinstitutionalization began well before this severe breakdown of the asylum system, when community-based alternatives were proposed and implemented during the 1920s and 1930s.³⁵ However, these deinstitutionalization endeavors were small-scale and gradual; the number of asylums erected during that same time period certainly outpaced the number of viable alternative treatment options.³⁶

Federal intervention eventually catalyzed the deinstitutionalization movement in the 1960s and 70s. Although the Supplemental Security Income Act of 1972 contributed to the deinstitutionalization boom, the Medicaid Act, enacted seven years earlier, was the initial spark. Within the Medicaid Act lies the IMD Exclusion – the conceptual centerpiece of this Note.

As perhaps the single most under-inclusive provision in the Medicaid Act, the IMD Exclusion is an outlier. It specifically prohibits coverage for patients between 21 and 65 years old living in a long-term care facility, defined as an IMD.³⁷ As constructed, the statute carves out very sparse exemptions to the Exclusion. Essentially, one qualifies for Medicaid mental healthcare coverage if they: (1) reside in a long-term care facility that qualifies as an Institute of Mental Disease (i.e., a facility with 16 inpatient/long-term stay beds or more) and are under the age of 21; (2) reside in a long-term care facility that qualifies as an IMD and are over the age of 65; or (3) do not reside in a long-term care facility that qualifies as an IMD.³⁸ Considering the specific medical needs of mentally ill individuals – sustained prescription medication, long-term counseling and therapy, among other inpatient or long-term-stay-oriented treatments – only a very narrow class of mentally ill patients are eligible for Medicaid coverage, directly because of the IMD Exclusion.

Congress included the Exclusion in the original Medicaid Act in 1965 and it has undergone few reforms over the last fifty years. In 1988, Congress amended the provision to define institutions of mental diseases as, “a hospital, nursing facility or other institution of more than sixteen (16) beds, that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services.”³⁹ Current federal regulations temper this definition by providing further criteria for identifying an IMD based on its “overall character”⁴⁰. The factors that go into such determination processes include the governance of the facility, the training and tasks given to the staff, the length of stay of the patients, and the types of services and treatments provided to the patients.⁴¹ As demonstrated later, these criteria further limit the efficacy of community-based treatment facilities, even in the context of short-term-stay and outpatient care. Additionally, they stand for the proposition that arguably, the changes made to the IMD Exclusion since its inception have tightened, instead of expanded, Medicaid recipients' access to comprehensive mental healthcare.

Initially, the IMD Exclusion seemed to satisfy state, federal, liberal and conservative goals alike. The provision bolstered further deinstitutionalization efforts, which Congress supported at the time of passage; the federal government was reluctant about intervening at all because it was concerned about funding the state-run systems, which were running so poorly.⁴² At the state level, state governments were incentivized to increase deinstitutionalization in exchange for maximum federal funds for limited inpatient and experimental outpatient coverage.⁴³ Liberal politicians, and those involved in the discourse surrounding mental health at the time, were satisfied because the provision allowed patients to be free from the inhumane asylum facilities and because they had faith in the efficacy of community-based centers.⁴⁴ Conservative minds were likely to be happy with the IMD Exclusion because it allowed state governments to save money by having Congress shoulder some of the burden of covering mental health patients.⁴⁵ The ideal result of the IMD Exclusion, then, was the creation of a locally-focused system of smaller treatment facilities where mental health patients received outpatient services in order to gradually wean their dependency on institutionalization. Such a system would allow mentally ailed patients to live free from abuse by state-run hospitals, known for inflicting further trauma as they cope with their mental illness. This, at least, was the objective in theory.

This section demonstrates that Congress wrote the IMD Exclusion as a response to extremely harmful systemic failings in state-run inpatient mental healthcare. State mental health asylums lacked the resources, the knowledge of effective mental health treatment, and the qualified staff necessary to serve their populations. Instead of allocating funds to reform public mental healthcare in the states directly, Congress used the Exclusion to divert the mentally ill patient population away from state hospitals and into smaller, more humane private treatment centers. Unfortunately, such good intentions were insufficient to modify the public healthcare system successfully. People afflicted by mental disease suffer from an array of complex disorders. Predicting what the long-term outcome of someone's mental illness will be poses an extremely difficult, if not impossible, challenge.⁴⁶ However, ensuring the best chance of recovery or substantial improvement of mental health requires holistic modes of treatment.

The next section demonstrates that the statutory and regulatory provisions of the IMD Exclusion generate a host of difficulties for mentally ill patients by limiting the efficacy of local, community-based treatment centers. These problems are responsible for laying out the pipeline to homelessness and often thereafter, incarceration.

III. WEAKNESSES OF THE IMD EXCLUSION

This section analyzes the problems caused by the IMD Exclusion, both indirectly and directly. Three main contentions explain the Exclusion's inability to sustain the mental healthcare system among the states. First, the IMD Exclusion incentivizes states to discharge their mentally ill, en masse, and provide substandard services. Second, the IMD Exclusion essentially hamstrings non-IMDs from providing quality treatment by prohibiting the staffing of psychiatric professionals and bars useful relevant medical treatment options in these facilities. Third, the 16-bed provision in the IMD Exclusion prejudices cities and towns with larger populations by fixing the restriction to a numerical figure instead of a percentage and increases the number of mentally ill people, particularly indigent ones, who end up homeless. These key issues lay the foundation of the patient-to-prisoner pipeline by creating the treatment gap for indigent, mentally ill people in the first place. Aside from the obvious harm of making access to care much more difficult, the most significant consequence of the IMD Exclusion's functionality is that it makes poor, mentally infirm individuals extremely vulnerable to contact with law enforcement and subsequently, the criminal justice system.

A. IMD EXCLUSION ADVERSELY INCENTIVIZES STATES TO EXPEL SIGNIFICANT PORTIONS OF THEIR MENTAL HEALTH POPULATION AND PROVIDE SUBSTANDARD SERVICES

One of the primary mechanisms of the IMD Exclusion is also one of its principal weaknesses: it encourages state hospitals to shift their mentally ill patients to other facilities in order to maximize federal matching funds. The Exclusion fails in this regard for several reasons. As written, the IMD Exclusion does not compel state hospitals to transfer their mentally ill patients to specific, or appropriate, treatment facilities in the course of deinstitutionalizing. The race for federal Medicaid subsidies spurs state hospitals to quickly and sharply reduce the number of beds in their psychiatric units, a reality reflected in recent data trends for psychiatric wards.⁴⁷ State hospitals continually choose to scale-back expenditures for mental health inpatient care over the well-being of those they are supposed to serve. Hospitals that choose to maintain IMD status, i.e. provide more than 16 beds for inpatient care, are effectively punished because they cannot be paid for treating Medicaid patients ⁴⁸ In sum, IMD Exclusion sanctions – even encourages – behavior that favors dollars over lives.

As state hospitals discharge the vast majority of their mentally ill population, these individuals generally will not enter a treatment facility or another program appropriate for their afflictions.⁴⁹ State hospitals largely transfer mentally ill people to places like nursing homes and private single-room occupancies.⁵⁰ Even facilities that appear to be appropriate for transfer quickly reveal themselves to be underequipped. In the mid-and-late 1990s, while the number of psychiatric beds in state hospitals declined, due to the IMD Exclusion, the number of private psychiatric facilities and psychiatric wards in general hospitals dropped dramatically as well.⁵¹ Overall, in 2016, the U.S. has an average of 11.7 psychiatric beds per 100,000 people. For comparison, in 1955, there were 337 beds per 100,000 people.⁵² A change in focus from inpatient care to outpatient care explains some of these figures but more critically, state hospitals were hastily shuttling mentally ill patients out of their psych wards to places that either cannot accommodate them or are woefully underprepared to do so in any capacity.⁵³

The aftermath of deinstitutionalization reveals two important consequences of the IMD Exclusion's financial mechanism. First, states still depend heavily on federal reimbursement for mental healthcare; yet now, thousands of mentally-ill patients are going completely untreated. Instead of assuming the initiative and creating substantial facilities to replace mental health units in public hospitals, states simply cut the number of people they would insure in order to maximize gains from the federal healthcare system.⁵⁴ Second, since the IMD Exclusion does not explicitly require state hospitals to verify that alternative facilities are up to par, hospitals simply need to focus on putting their mentally ill somewhere. Oftentimes, the “somewhere” is an inadequate at best, completely inappropriate at worst, facility or location for mentally ill individuals to be assigned. About a decade ago, the Treatment Advocacy Center reported:

Largely as a result of the IMD Exclusion, hundreds of thousands of patients have been deinstitutionalized to the streets or trans-institutionalized to nursing homes, general hospitals, and other similar institutions where federal funds pay most of the cost. Hundreds of thousands more are incarcerated in prisons or jails – institutions ill-equipped to handle their special needs. In the past four decades, American has effectively lost ninety-three percent of its much-needed psychiatric hospital beds, resulting in increased rates of homelessness, incarceration, suicide, victimization and violence.⁵⁵ [Emphasis added]

The above-described trends continue today. In 2013, nearly 43% of all Americans suffering from mental illness did not receive treatment.⁵⁶ These figures highlight one of the most alarming implications of the IMD Exclusion: it indiscriminately and haphazardly places the mentally ill in a variety of unequal scenarios, often rationalizing that traditional inpatient treatment is no longer necessary for those individuals. Before explaining the plight of those patients who were not fortunate to at least be placed in a nursing home or similar community-based center, this Note determines that these alternative facilities are not much more effective in treating and managing mental health.

B. THE IMD EXCLUSION REGULATES ALTERNATIVE FACILITIES IN A WAY THAT LIMITS THEM TO PROVIDING INADEQUATE OR NO MENTAL HEALTHCARE FOR MENTALLY ILL INDIVIDUALS

The IMD Exclusion imposes rigid guidelines on how alternative treatment facilities should be run. Whether the Medicaid system designates an alternative treatment facility as an IMD depends on the “overall character” of the facility, which is quantified by a list of ten unpublished and interpretative factors established by the U.S. Department of Health and Human Services (“HHS”) at the inception of the Medicaid Act in the mid-1960s.⁵⁷ These regulations not only shrink any remaining initiative for the states to be creative and flexible when designing alternative treatment centers but inhibit patient access to proper care in several ways.

IMD “qualification” provisions inflict financial pressure on facilities either to conform to standards that frustrate efforts to provide quality mental healthcare or lose federal funding. Many of the guidelines used by HHS to identify institutes of mental disease prohibit alternative treatment centers from, inter alia: continuing patients' psychiatric treatments from the hospital they were transferred from; administering antipsychotics; being under the jurisdiction of the state's mental health authority, which would arguably subject the facility to rules and regulations that would benefit mentally ill patients; or employing staff who specialize in psychiatric care in any form or ritual.⁵⁸ Medicaid has provisions that prevent alternative facilities from admitting severely ill psychiatric patients, lest a facility wants to bear IMD status and lose federal money.⁵⁹ Much like the state hospitals, which are dramatically reducing their number of psych wards and centers since the Medicaid system was enacted, community-based centers and other alternative facilities must decide between covering thousands of patients and recouping thousands of dollars.⁶⁰

The HHS's “overall character” factors further insulate Medicaid's worst instincts about financing mental healthcare. Helen Jennen articulates it best: “If facilities are so penalized for hiring staff with such training, or for administering the proper psychopharmacological drugs, the obvious effect will be to discourage facilities from providing these services.”⁶¹ The guidelines are brutally paradoxical: treatment centers must strip away essential services for the mentally ill in order to receive funding to treat the mentally ill. Even considering the IMD Exclusion's function as a financial control on expensive psychiatric medication, the requirements and regulations associated with it vastly undermine states' ability to provide meaningful aid to mentally ill persons without incurring a lion's share of the costs.

The IMD Exclusion also poses harsh ultimatums on affected patients. Critically, mentally ill patients who choose to stay in IMD facilities lose their Medicaid eligibility.⁶² IMD patients who suffer from both mental illness and other physical ailments, and who need to be treated for their non-mental illnesses, must go through the burdensome process of “[being] discharged from the IMD, have their Medicaid eligibility reinstated, and then be readmitted to the IMD.”⁶³ The process can be especially difficult for indigent patients, who would need to afford transportation and other attendant costs that may be incurred during transfer.⁶⁴

Admittedly, the spending budget for any public healthcare system is ultimately bounded by dollars and practicalities; however, the severity and potential devastation caused by these stark choices imposed on patients and facilities is symptomatic of what can now only be seen as a crippling policy mechanism. Healthcare providers do not to need to make such extreme, seemingly counterintuitive, coverage decisions for most other categories of patients. What specifically distinguishes mentally ill patients from other Medicaid recipients, such that a state may refuse to treat large portions of the population? When considering its isolating effect compared to other types of illnesses covered by Medicaid, the IMD Exclusion violates basic, fundamental notions of fairness and Constitutional principles of Equal Protection.⁶⁵ As this Note later demonstrates, mentally ill people make up an alarmingly substantial portion of those who are in or have gone through the criminal justice system with long-term or persistent health issues; this fact is not by accident but by design.

For mentally ill persons who are admitted to non-IMD alternative treatment centers, which functionally are inappropriate facilities, the outlook is equally discouraging. As a result of the “overall character” criteria, treatment facilities that wish to receive federal Medicaid funding to treat mentally ill persons—“transitional housing,” shelters, general hospitals—purposefully downgrade the quality of the mental healthcare.⁶⁶ Nursing homes are among the most common places to which mentally ill people are discharged in the deinstitutionalization process. For the target population of the IMD Exclusion—again, people ages 21-65—nursing homes are inappropriate locales.

Because of HHS's “overall character” factors and by virtue of their general function, nursing home facilities do not hire psychiatric or mental healthcare professionals; most staff at these centers specialize in geriatrics and physical therapy.⁶⁷ At most, nursing facility staff can administer conversational or physical therapy as a form of medication. Aside from the obvious problem this limitation poses—that patients are unable to receive more specialized mental healthcare if they need it—studies show that medication of mentally ill in nursing homes are often abused by staff, who use the medication to control and more easily manage patients.⁶⁸ The law does little to curb this behavior. Pursuant to the Omnibus Budget Reconciliation Act (“OBRA”), nursing home staff are permitted to use antipsychotic drugs as a method of controlling patients with behavioral disorders in most cases, with the sole exception of dementia.⁶⁹ Indeed, the idea that Congress sanctions the use of mental health medication as a restraint but withholds funding for countless healthcare projects that necessitate their use as legitimate treatment is inescapably absurd.

Studies further suggest that nursing home and similar alternative treatment facilities will also misrepresent mental illness diagnoses: “The high prevalence of antipsychotic use relative to diagnosed mental disorders might indicate that nursing home residents' mental disorders are underdiagnosed or misdiagnosed in order to avoid being excluded as an IMD.”⁷⁰ In the context of this frequent overmedication practice, the high rates of reported episodes of mentally ill patients suffering from depression is extremely disturbing.⁷¹ Unfortunately, these facilities only possess the appearance of viable alternative treatment centers. In reality, they are wholly unable to manage the mentally ill patients they do admit without causing further risk of severe mental damage. The IMD Exclusion is responsible for creating a public mental health system that not only promotes substandard mental healthcare but squarely puts many of its patients in scenarios that severely threaten their health.

C. THE IMD EXCLUSION LIMITS THE NUMBER OF PATIENTS WHO CAN BE ADMITTED TO NON-IMD FACILITIES, CONSTRUCTIVELY INCREASING THE NUMBER OF MENTALLY ILL PEOPLE WHO ARE HOMELESS

Another premier feature of the IMD Exclusion is that it limits the number of beds in alternative, community-based treatment facilities made available to mentally ill patients to 16.⁷² Furthermore, the “overall character” factors limit the number of those mentally ill patients who are allowed to receive inpatient treatment in those facilities to 50%.⁷³

These stringent caps on patient admissions necessarily leaves many mentally ill, most likely the indigent mentally ill, vulnerable to homelessness. Either the facilities in a specific region or area are too full to accommodate the entire mentally ill population or they close under the strain of the regulatory requirements imposed by the IMD Exclusion and state budget cuts.⁷⁴ In either scenario, the result is roughly the same: large numbers of people remain untreated, unhoused, and unsupported.

As demonstrated in this section of the Note, deep flaws exist in the machinery of the IMD Exclusion and by extension, the Medicaid system. These deficiencies pose serious challenges for mentally ill people to get the requisite treatment in a post-deinstitutionalization United States. Homeless or not, American society marks untreated mentally ill people with indelible stigmas: “crazy”, “unstable”, “unhinged”, “dangerous.” Without effective, appropriate treatment, mentally ill people are decontextualized by those around them. Ultimately, they are left vulnerable to several externalities that further endanger their health and their lives. One of the primary externalities that pose such a threat are law enforcement and in general, the criminal justice system.

The next section will continue to demonstrate the structure of the “patient-to-prisoner pipeline” by drawing a connection from the access gap created by the IMD Exclusion to the all-too-frequent encounters between mentally ill individuals and the law.

IV. THE CRIMINAL JUSTICE SYSTEM, LAW ENFORCEMENT AND THE INDIGENT MENTALLY ILL: THE EXTENUATING EFFECTS OF THE IMD EXCLUSION

The death of Deborah Danner is not only a tragic story about the prevalence of police brutality but also an example of the frequently problematic exchanges between low-income, mentally ill persons and law enforcement. She was a 66-year-old Black woman who lived in the Bronx and battled with schizophrenia for over 30 years.⁷⁵ After an anonymous phone call to NYPD complaining about Ms. Danner, police arrived at her apartment on the evening of October 18, 2016. In midst of a confrontation with the police, she was fatally shot by one of the officers.

At the time this Note was written, many of the facts detailing the incident between the NYPD and Danner are still not public. What is known is that although Danner was armed with a bat at the time of the incident, she was outnumbered by 5 officers.⁷⁶ Additionally, at least one of the officers was armed with a Taser but declined to use it to subdue Ms. Danner.⁷⁷ The incident leading to her death was not her first encounter with law enforcement; her behavior previously put her in contact with law enforcement as one of more than 100,000 calls made to authorities every year.⁷⁸ The media, despite knowing that Ms. Danner suffered from mental illness described her in terms that dismiss her medical condition and debase her worthiness of being treated with the dignity that any person, ill or not, should be afforded.⁷⁹ For example, New York Daily News article covering the shooting referred to Ms. Danner as “deranged,” a clear stigmatization of her mental disease. In May of 2017, a grand jury indicted NYPD Sergeant Hugh Barry with second-degree intentional murder for killing Ms. Danner.⁸⁰ Even if Sargent Barry is convicted, Ms. Danner's life and dignity as a woman suffering from a psychiatric disorder can never be fully restored.

The case of Ms. Danner sadly illustrates one of many dangerous consequences that untreated, mentally ill people face. This section expands on the systemic issues that precipitate tensions between the very mentally ill and the criminal justice system, with particular focus on the police, jails, and prisons. In doing so, this section evaluates the efficacy of existing police policies regarding the handling and apprehension of mentally ill persons, and the healthcare system provided to mentally ill persons in jail and prison. It also explains the nexus between the IMD Exclusion and the criminalization of the mentally ill. As described in the previous section, the IMD Exclusion provision creates several adverse policy outcomes, inter alia: a dearth of inpatient care available outside of the state hospitals, community-based centers that are heavily de-incentivized from hiring trained, mental healthcare professionals, and poor timing with regards to adequate funding in community-based healthcare solutions. These policy outcomes directly create the conditions that put patients in greater proximity to the criminal justice system. Surely, other factors contribute to the criminalization of the mentally ill: feeble police policies for interacting with mentally ill persons; a shift in attitude among prosecutors, who pursue convictions and tough sentences for mentally ill people and rejected alternative sentencing options like treatment; and a general disdain and lack of understanding by the public of mental illness and mentally ill patients.⁸¹

However, the IMD Exclusion and deinstitutionalization critically allowed for many mentally ill people to be relinquished from the care and custody of the state without an effective replacement.⁸² As contended below, the discharges from hospitals, coupled with the difficulties posed by the IMD Exclusion in terms of accessing community-based healthcare, exposed patients to a very different, more hostile relationship with the state in the form of law enforcement.

After establishing the causal nexus between the IMD Exclusion and the increase in interactions between mentally ill persons and law enforcement, this Note shifts analysis towards addressing the criminalization of mentally ill people in the United States. Generally speaking, American society struggles with understanding and empathizing with mental illness. Some people view afflicted individuals as nuisances at best and “crazy” and “dangerous” threats at worst. Even Americans who earnestly believe they are progressive on understanding mental illness fall miles short. We claim to understand the daily struggles of mentally ill people and are more empathetic towards instances of mental illness that we know has a source, a cause.⁸³Our biases towards mental illness, well-intentioned or not, contribute to an “other-ization” of mentally ill people. As deviants from our sanctioned “normal” society, the mentally ill are often misconceived, and their behavior is strictly diagnosed by law enforcement as vagrant and criminal. Thus, post-deinstitutionalization, the mentally ill are arrested more often than they are treated for their condition. Accordingly, this Note performs a systematic examination of the criminal justice system, ultimately concluding that it is woefully unqualified to provide mental healthcare services. This holds especially true for prisons and jails, where many jurisdictions possess outdated regulations for mental healthcare and skirt costs for treatment despite a growing number of inmates who are diagnosed with some form of mental illness or co-occurring ailments.

The healthcare effects resulting from the implementation of the IMD Exclusion converge to create two major issues for those mentally ill who depend on Medicaid and public healthcare. The first issue is straightforward: many patients who are discharged from state hospitals are denied proper access to mental healthcare. Community health centers fill up their mentally ill quotas quickly, and many centers end up closing, leaving patients with no viable treatment options. The second issue is as devastating but more abstract: the mentally ill are now increasingly exposed to the general public.

The IMD Exclusion created barriers to healthcare that not only created a serious risk of patients' conditions worsening, it also left them without many basic necessities. Throughout the 1980s, many patients were released into the community.⁸⁴As patients of the public healthcare system, many mentally ill who are discharged from hospitals or unable to access community centers are low-income. As previously mentioned, they leave without a settled housing situation and lack support, either professional or from family members.⁸⁵

In the aftermath of deinstitutionalization and the launch of the IMD Exclusion, the homeless population and the mentally ill population are steadily overlapping. Today, most reports on mental health and homelessness report that somewhere between 20% and 25% of the homeless population, country-wide, has a mental disorder.⁸⁶ Some estimates are more concerning, reporting that 33% ‒ one third – of all homeless people living in the United States are afflicted by mental illness.⁸⁷ Since deinstitutionalization and the implementation of the IMD Exclusion, the number of mentally ill who are homeless has steadily increased in American cities and towns.⁸⁸ Notably, despite the increasing number of homeless mentally ill, the number of community mental health centers increased greatly from the end of the 20^th century into the early 21^st century, from approximately 210,000 to 800,000.⁸⁹ These statistics pose an interesting juxtaposition: why are so many people suffering from mental disease homeless when there are so many more community centers today? It's worth remembering here that these community centers cannot provide permanent housing and, in many cases, because of the IMD Exclusion, they cannot provide long-term mental healthcare.

Homeless or not, most mentally ill individuals still face social stigma from the general public. The same men and women described at the beginning of this Note began appearing more and more frequently in public spaces, on major streets, and outside of major commercial centers.⁹⁰ Their presence was not well-received: people were unsettled and perplexed by their behavior. These feelings quickly turned to fear, fear of the often unpredictable, sometimes idiosyncratic nature of many people suffering from mental illness.

Americans did not cultivate this fear overnight; people were aware of the gruesome psychiatric wards from the 1950s, so society has long marginalized this demographic.⁹¹ What changed is the proximity to the so-called “crazies”: they were in our communities, our neighborhoods, our spaces. Accordingly, people devised ways to keep mentally ill people out of sight and, further, out of mind. Ideologues of the “Not In My Backyard” (“NIMBY”) variety worked to preclude mentally ill individuals from employment opportunities and housing options.⁹² Community boards worked to target mentally ill people as vagrants. A 2006 federal court decision exposes the attitudes that informed this mobilization on full display:

According to the court's findings, when a regional healthcare provider wanted to establish a home-like living situation for a group of people with mental disabilities within a Pennsylvania township, the good people of that town packed the zoning board hearing and expressed their concerns that these individuals might be “child molesters, fire bugs, or drug addicts” or likely to go “berserk.” Moreover, town residents warned that they would have to “get on guard, go buy guns, get great big dogs” to protect themselves, if these “type of people were allowed to move in.⁹³

The perception that people suffering from mental disease are inherently antagonistic and hostile is fertile ground that facilitates their eventual criminalization.

Why are the police, instead of social workers or mental health professionals, the first line of response when dealing with mentally ill, homeless people, even when they are not actively engaged in serious criminal activity? Two principles in the common law authorize law enforcement to intervene in the lives of people suffering from mental disease: the police power of states to ensure the health and safety of the citizens in its jurisdiction and; the duty enshrined in the police to ensure the safety and welfare of the community.⁹⁴ Armed with this common-law authority, law enforcement officers are usually the first point of contact between the mentally ill and the state's criminal justice apparatus.⁹⁵ In conjunction with their authority, law enforcement responds to the uninformed public fear of mentally ill persons with aggressive policies that often are uninformed from a treatment-oriented perspective on how to deal with suspects afflicted by mental illness.

During the 1980s and 1990s, many local police departments adopted “tough on crime” policies that prioritized making arrests and keeping those viewed as vagrants off the street.⁹⁶ One of the most prominent and popular theories guiding these policies is the “Broken Windows Theory,” which proposes that law enforcement can improve the quality of living and neighborhood safety against major crimes by cracking down on several categories of low-level offenses. As a result, the police focused on: property crimes, substance abuse, lewd conduct and “vagrant” crimes such as graffiti and loitering. Broken Windows-based policy and similar approaches to law enforcement in the 1980s and 1990s by design targeted several groups of people who posed a threat, imagined and unimagined, to communities across the country. This includes a panoply of characters: panhandlers, drunks, addicts, rowdy teenagers, prostitutes, loiterers, and the mentally ill, which may possess some, none or all of the above characteristics.⁹⁷ A majority of these targets, like Deborah Danner, who was mentally ill but by all accounts, a law-abiding citizen, are Black and Latino. No matter the permutation of these groups of people, it is well documented that members of many communities in the United States perceive them as dangerous.

Some or many law enforcement officers harbor the same fears. When it comes to mentally ill persons in particular, many police departments are unfamiliar with the constellation of attendant issues affecting those suffering from mental disease; their knowledge is no more specialized than laypeople.⁹⁸A lack of specialized mental health knowledge makes it extremely difficult for law enforcement officers to identify and differentiate between symptoms of mental illness and the behavior of a relatively healthy but drunk, intoxicated, or aggressive suspect.⁹⁹ Even when mental health services are available, they defer first to police departments in spite of lacking interventional or crisis-response skills.¹⁰⁰ The structure of this response chain places officers who are armed and medically untrained as the state's primary delegate to deal with low-income, often homeless and constantly stigmatized, mentally ill suspects.¹⁰¹ These encounters often produce one of three major deleterious outcomes.

The first type of outcome is the one that happened in the tragic case of Ms. Danner – mentally ill suspects are either severely injured or killed in their encounters with law enforcement. The Washington Post reported that in 2015, “of nearly 1,000 people shot and killed by police officer … 25 percent displayed signs of mental illness.”¹⁰²

The second type of outcome is arrest and incarceration. Arrests harm the mentally ill insofar as the fact that it may lead to incarceration. In light of the statistics of incarcerated mentally ill people, mentally ill arrestees are placed in prisons and jails at an alarming rate. Inmates in American prisons and jails identified as having a serious mental condition make up 14% of the total population.¹⁰³ A 2006 survey by the Bureau of Justice Statistics reported that in state prisons, 73% female inmates and 55% male inmates suffer from at least one mental health problem; in federal prisons, 1 in 4 inmates had a mental health problem they were receiving treatment for.¹⁰⁴ While less visceral than police brutality and shootings, arrests still produce seriously troubling results by diverting mentally ill suspects away from viable treatment options in favor of substandard healthcare in correctional facilities.

The third outcome involves neither death nor detention by police: officers will informally deal with the mentally ill suspect instead of arresting them or refer them to treatment services. Recent surveys of local police departments reveal that a majority of officer encounters (70-75%) with people believed to be mentally ill resulted in “counseling and releasing.”¹⁰⁵

The above statistic elicits pause, however, for a few reasons. For one, it doesn't reveal the number of suspects who were informally counseled and released became repeat offenders who were subsequently arrested or subject to police brutality. Second, it gives us no definition of what “informal counseling” entails; for example, would an officer approaching a homeless individual, tapping them on the shoulder with their nightstick, and simply ordering them to move to another location in Port Authority qualify as “informal counseling”? Third, the statistic lacks any information on the criteria officers use to determine if a suspect is mentally ill. Fourth, the statistic flies in the face of other studies which state that as many as 50% of all homeless people have a criminal record.¹⁰⁶ Unless instances in which a homeless individual is counseled and released by the authorities is included in their criminal record, the two figures appear to be in direct conflict. Regardless, the reported figures underscore a larger point: for the mentally ill persons who are shut out from the public health system because of the obstructions created by the IMD Exclusion, if they are not arrested or killed, they usually remain helpless and without adequate access to healthcare.

In sum, the treatment-vacuum created by the IMD Exclusion exposes mentally ill individuals to a public that is wholly unprepared, or unwilling, to accept them in their state. In response to public panic, law enforcement has taken an increasingly larger role in handling mentally ill people in the aftermath of deinstitutionalization. They are often no more trained in dealing with mentally ill persons than the folks who want them out of the neighborhood. As a result, police interactions generally yield unfavorably results for the health and safety of mentally ill individuals. These outcomes range from the most severe (injury or death) to the most ostensibly neutral but practically problematic (no action/informal interactions).

V. PATHS TO REFORMING THE EXCLUSION

As shown above, the IMD Exclusion is the both the cause and the catalyst for a long chain of adverse consequences that significantly impede poor, mentally ill people from receiving appropriate healthcare and in many cases, worsen their mental condition. The IMD Exclusion's spartan 16-bed restriction for eligible facilities forces state and local treatment facilities to dramatically circumscribe their capacity for inpatient services. Furthermore, the facilities that do manage to meet the 16-bed limit must also roll back or completely eliminate other essential services for mental health treatment – the number of qualified psychiatric professionals, the kinds of medical treatment and prescriptions they're allowed to give mentally ill individuals, and a litany of other tools that frustrate the possibility of affordable, comprehensive, treatment for psychiatric and substance abuse disorders. The inability of these Medicaid funding-eligible facilities to meet the growing and evolving needs of mentally ill individuals forces many individuals, who are often low-income lack housing, to take to the streets. Lacking stability and medical assistance, homeless mentally ill individuals are prime targets for criminalization. Instead of psychiatric experts, untrained and under-equipped law enforcement officers poorly manage a vast majority of the low-income, mentally ill populace. The criminal justice system then aggressively funnels these individuals into jails and prisons, putting the United States' most vulnerable populations into its most oppressive settings.

In order to stop and reverse this devastating “patient-to-prisoner pipeline”, federal and state government must seriously retool the machinery responsible for treating and caring for mentally ill individuals. The following suggestions place an eye towards reform on both the healthcare side and the criminal justice side of this pipeline. The reforms are not exhaustive but instead represent the initial steps in a long process of correcting the course of mental health treatment in this country.

A. REPEAL THE IMD EXCLUSION

The most radical proposal is probably the most effective one: Congress should eliminate the IMD Exclusion and the associated eligibility rules promulgated by the Department of Health and Human Services. Simply put, the IMD Exclusion “isolates individuals with mental illnesses from all other Medicaid-eligible populations, contradicts the principles of equal treatment and insurance parity for treatment of mental illnesses, and undermines the ability of states to develop comprehensive systems of care.”¹⁰⁷ Removing the Exclusion from the Medicaid Act would almost instantly expand mental health coverage by allowing larger treatment facilities to receive federal funding and accept patients regardless of their insurance status. Additionally, repealing HHS “IMD factors” rules would allow facilities to offer a higher quality of mental healthcare to patients by allowing them to prescribe psychiatric medicine, hire licensed mental health professionals, and work closely with the corresponding state mental health authorities.

A complete repeal of the IMD Exclusion would certainly cause political and fiscal challenges. In June of 2017, a group of U.S. House Representatives introduced a bill to repeal the Exclusion.¹⁰⁸ The entitled Road to Recovery Act would fully eliminate the IMD Exclusion and extend unrestricted Medicaid funding to inpatient facilities with more than 16 beds.¹⁰⁹ At the time this Note is published, the House has made no further efforts to effectuate this proposal, as no hearings have been scheduled, and hopes of further momentum is low. Despite rising bipartisan support for mental healthcare reform at the federal level, the Republican-controlled Congress is resolute in its opposition to increases in healthcare spending. Repealing the IMD Exclusion would certainly raise federal costs, as more facilities become eligible for coverage; the Congressional Budget Office estimated that a repeal would increase spending about $40-$60 million over 10 years.¹¹⁰ Furthermore, Republicans recently mounted an aggressive but ultimately failed attempt to repeal significant parts of the Affordable Care Act, a clear signal of their aversion to providing more people access to healthcare – including mental health care.

Absent a surge in Congress' coalition in favor of expanding access to healthcare, a repeal of the IMD Exclusion appears to be fairly unlikely at the moment.

B. ADJUST THE PARAMETERS OF THE IMD EXCLUSION

In lieu of fully repealing the IMD Exclusion, lawmakers can enact amendments that roll back or modify some of the provision's strictures. Health policy expert Brittany La Couture makes several suggestions to this end.

La Couture first suggests relaxing limitations set by the IMD Exclusion. The provision could narrow its definition of an “institution of mental diseases” from a 16-bed facility to a 30-bed one; or increase the permissible length of inpatient stay from 15 days to 60 or 90 days.¹¹¹ The U.S. Senate proposed similar compromises. In May of 2017, the Senate introduced a bill for the Addiction Recovery Expansion Act, which would grant Medicaid funding to mental health treatment facilities with up to 40 beds and a maximum inpatient stay of 60 days.¹¹² An increase in the number of beds combined with an increase in the length of stay would potentially give treatment facilities more time to make accurate diagnoses; improve treatment efficacy and encourage innovation by allowing facilities to observe patients for longer and determine what works and what fails; and of course improve capacity for mental health Medicaid coverage.

La Couture also suggests circumscribing the number of mental health conditions covered by Medicaid. Specifically, she considers excluding substance abuse disorders from coverage, which would “effectively lower the number of patients eligible for mental health services … and exempt many general hospitals with psychiatric beds [from the IMD Exclusion].”¹¹³ While removing substance abuse disorders as a coverable illness might accomplish this objective, doing so might “over-reduce” the number of eligible patients with mental healthcare needs. Drug and substance abuse often co-occurs with mental health problems. Mentally ill individuals who are unable to get proper treatment often turn to drugs as a form of self-medication; inversely, use of certain substances may increase some people's risk of developing mental illness.¹¹⁴ Recent reports identify as many as 7.9 million people who suffer concurrently from mental and substance abuse disorders.¹¹⁵ Thus, distinguishing drug users from non-drug users for the purposes of the IMD Exclusion may be very difficult. Such a change in the law would likely diminish Medicaid coverage of mental health to the point where its scope is all but negligible.

Alternatively, relaxing the “overall character” factors issued by HHS might increase the quality and amount of care more effectively. Many of the factors discourage mental health treatment facilities that are eligible for Medicaid funding from relying on tools formally associated with psychiatric care, such as state mental health authorities and on-site psychiatric specialists.¹¹⁶ Allowing facilities to freely pursue some of these resources would allow them to give meaningful necessary treatment, especially for patients with severe psychiatric and mental health disorders.

C. STATES SHOULD OPT OUT OF THE IMD EXCLUSION BY FILING SECTION 1115 WAIVERS

States also possess the ability to reduce the IMD Exclusion's prohibitive effects on federally-funded mental healthcare. Pursuant to the Social Security Act, states may apply to HHS's Center for Medicaid Services (“CMS”) for a § 1115 waiver, which permits exemptions from certain Medicaid requirements.¹¹⁷ States seeking the waiver must propose a project “found by the Secretary to be likely to assist in promoting the objectives of the Medicaid program.”¹¹⁸ If CMS approves a waiver request, the state is eligible to receive matching federal dollars for the cost of services delivered to Medicaid recipients who benefit from the sanctioned project.¹¹⁹ Essentially, the § 1115 waiver endows states with greater latitude in creating innovative healthcare programs that best serve the Medicaid recipients in their jurisdiction.¹²⁰

Recently, states are using the waiver to partially expand IMD services to Medicaid recipients.¹²¹ To date, HHS has granted IMD Exclusion waivers for projects in eight states (California, Maryland, Massachusetts, New Jersey, Utah, Virginia, West Virginia, and Vermont) and is currently reviewing waiver requests to allow some IMD services in six states (Arizona, Illinois, Indiana, Kentucky, Massachusetts, Michigan, and Wisconsin).¹²² Specifically, states like Indiana, Illinois and Kentucky are requesting waiver provisions that resemble some of the policy modifications to the IMD Exclusion mentioned above, like an increase in the number of days a Medicaid recipient is permitted to receive inpatient services. Other states, like Massachusetts, are proposing more aggressive reforms, such as a total removal of all payment and length-of-stay restrictions on substance abuse and mental health services. As of December 14, 2017, CMS approved Massachusetts's waiver proposal, expanding Medicaid funding for IMDs under a wider umbrella of services.¹²³ Even if CMS denies some of these waiver requests, though, they might at least serve as a referendum on the IMD Exclusion's effectiveness and a generate more attention to its deficiencies.

The § 1115 waiver presents a practicable alternative to waiting for Congress to reform Medicaid for mentally ill recipients. A continued demand for waivers to provide IMD services under Medicaid may pressure HHS and Congress to reconsider the IMD Exclusion and its archaic approach to funding public mental healthcare delivery systems.¹²⁴ The waivers may also pave the way for psychiatric hospitals to re-open, which would improve care; although states should continue to invest in community mental health centers, psychiatric hospitals offer prescription medicines, and constitutes an important pillar of mental health treatment, especially for severe cases of mental disease.¹²⁵

Despite its evident advantages, the § 1115 waivers cannot completely eliminate the IMD Exclusion. Most waivers are set to expire after several years; states may apply to renew the waiver but approval in these cases is not guaranteed. CMS also requires states to apply separately for waivers exempting IMD substance abuse services and waivers exempting IMD mental health services. This distinction may cause some states to prioritize seeking waivers for one class of IMD service over the other. More critically, separating these two types of services may undermine the very real notion that substance abuse and mental health disorders are often correlated and thus should often be treated in tandem, holistically, and comprehensively. While a more uniform and permanent solution is preferable, overall, the § 1115 waivers are a useful tool for circumventing the IMD Exclusion, for the time being.

D. INVEST IN HOUSING UNITS DESIGNED FOR MENTALLY ILL INDIVIDUALS

States and localities should seriously consider developing special housing for low-income, mentally ill individuals. Providing the mentally ill with a stable living situation would facilitate long-term recovery and allow states to deliver mental health treatments in a more hospitable environment than a psychiatric ward. Moving mentally ill individuals away from jails, prisons and emergency rooms and transferring them into housing might be more economically efficient, costing taxpayers less money than incarceration and sparing mentally ill individuals from the corrosive conditions of prison.¹²⁶ Furthermore, studies show that offenders who have a disability are less likely to be rearrested when they have secure housing.¹²⁷

Accordingly, special housing developments might motivate police departments to implement positive diversion tactics for homeless individuals suffering from mental health issues instead of merely resorting to handcuffs. In Everett, Washington, a city of just over 100,000 people, social workers and police officers are actively combing the streets to connect people in need of mental healthcare with appropriate services, including special housing. James McGee, a 27-year-old Everett resident fighting opioid addiction, received much-needed substance abuse services by turning to the town's police department:

“You draw that line, tell yourself you're not going to pass that, and the next thing, you do,” McGee said. “Then you keep going and going. Before I know it, I'm sticking needles in my body, doing heroin and meth every day.” He eventually lost his job at Costco and his apartment. Shortly after overdosing in the parking lot last summer — and being revived by someone who had overdose-reversal spray at hand — McGee walked into a police station and pleaded for help. Kaitlyn Dowd, a social worker embedded with Everett police, helped connect him to treatment about 100 miles away. Now he's living in sober housing, more than 90 days clean, working a construction job and attending as many recovery meetings as possible. “I never thought I would taste recovery like this,” he said. “Everyone deserves a second chance.”¹²⁸

While special housing developments for the mentally ill may not directly reform or modify the IMD Exclusion, they serve as a great vehicle for streamlining the delivery of healthcare services and stemming the flow of the “patient-to-prisoner pipeline.” States should submit § 1115 waivers that center around special housing units where patients can receive periodic visits from mental health and psychiatric professionals. In jurisdictions where such special housing is available, police officers, prosecutors and courts should prioritize diverting defendants with severe mental health needs away from prisons and jails and into homes where they may actually receive appropriate medical care.

VI. CONCLUSION

This Note offers an explication of how the current public mental health laws and policies at the federal level have crippled local efforts to provide human treatment for low-income, mentally ill individuals. My analysis centers around the IMD Exclusion provision, which is responsible for severely limiting the capacity for community-based treatment centers to operate as effective mental health resources for their potential patients.

To be clear, many other actors, stakeholders, and systemic deficiencies that contribute to the marginalization of poor mentally ill persons in the United States. This Note's analysis identified a few of them: local law enforcement, correctional facilities, correctional mental health services, and politicians. Each has its own part to play in diminishing health services or creating barriers to healthcare access. Lack of police training around issues of mental illness leads to violent interactions, incarceration, or continued homelessness for the mentally ill. Resources allocated towards healthcare in prisons and jails have led to institutional failures in diagnosing inmates who are afflicted by mental illness, either before or because of their incarceration; treatment is also underfunded.

For their part, politicians must answer for the disastrous domino-effect of the IMD Exclusion. At the inception of Medicaid's rollout in the 1960s, we can fairly view the IMD Exclusion as a well-intentioned solution to inpatient-centered model of care for the mentally ill. Congress was rightly concerned about the safety of psychiatric wards, which lacked the staff and institutional capacity to give adequate care to patients. In the abstract, the movement to transfer patients to more intimate outpatient facilities in their communities would accomplish several goals: it would promote a more humane environment compared to the cold and abusive psychiatric ward setting; it would give local communities the opportunity to innovate in their approach to treating the mentally ill; and it would better connect patients to their communities.

After over 50 years of testing, it is more than clear that the IMD Exclusion is not accomplishing these goals; its parameters are far too restrictive. Ultimately, community treatment centers lack the institutional capacity to accommodate the mentally ill, leaving millions of anguished people to fend for themselves. Politicians have an obligation to change the IMD Exclusion for the sake of those suffering without mental healthcare. Federal and state governments have several options to modify the effects and policy of the IMD Exclusion. Choosing to do nothing not only allows the public mental healthcare system to continue failing an overwhelming portion of its patients but perpetuates intervention from a criminal justice system wholly unsuited to operate as a surrogate for treatment, rehabilitation, or recovery.

FIGURE 1

Footnotes

1

Locked in, The Economist (Aug. 3, 2013), .

2

Susan M. Jennen, The IMD Exclusion: A Discriminatory Denial of Medicaid Funding for Non-Elderly Adults in Institutions for Mental Diseases, 17 Wm. Mitchell L. Rev. 339, 370 (1991); Dahlia Lithwick, Prisons Have Become America's New Asylums, Slate (Jan. 5, 2016), http://www.slate.com/articles/news_and_politics/jurisprudence/2016/01/prisons_have_become_warehouses_for_the_mentally_ill.html [].

3

Brittany La Couture, The Problems with the IMD Exclusion, American Action Forum: Insight (Oct. 15, 2015), https://www.americanactionforum.org/insight/the-problems-with-the-imd-exclusion/ [].

4

Joanmarie Ilaria Davoli, No Room at the Inn: How the Federal Medicaid Program Created Inequities in Psychiatric Hospital Access for the Indigent Mentally Ill, 29 Am. J.L. & Med. 159, 172 (2003).

5

Lithwick, supra note 2.

6

E. Fuller Torrey et al., More Mentally Ill Are in Jails and Prisons than Hospitals 101, Treatment Advocacy Cent. (2014).

7

Ana Swanson, A Shocking Number of Mentally Ill Americans End Up in Prison Instead of Treatment, The Washington Post: Wonkblog (Apr. 30, 2015), .

8

Id.

9

Swanson, supra note 7.

10

Swanson, supra note 7.

11

Swanson, supra note 7.

12

Rodney Whitlock, The IMD Exclusion: Changes Now and Changes to Come, Mintz Levin: Health Law & Policy Matters (Apr. 27, 2016), https://www.healthlawpolicymatters.com/2016/04/27/the-imd-exclusion-changes-now-and-changes-to-come/ [].

13

Mental and Substance Abuse Disorders, Substance Abuse and Mental Health Servs. Admin.: Topics, https://www.samhsa.gov/disorders [].

14

Id.

15

Gary J. Clarke, In Defense of Deinstitutionalization, 57 The Milbank Memorial Fund Q./Health and Soc'y 461, 465-67 (1979).

16

Walid Fakhoury & Stefan Priebe, Deinstitutionalization and Reinstitutionalization: Major Changes in the Provision of Mental Healthcare, 6 Psychiatry 313, 314 (2007).

17

Davoli, supra note 4 at 169.

18

1965 U.S.C.C.A.N. at 2085; Davoli, supra note 4 at 169; John F. Edwards, The Outdated Institution for Mental Diseases Exclusion: A Call to Re-Examine and Repeal the Medicaid-IMD Exclusion, 16-19 (unpublished) (on file with Mental Illness Policy, available at [perma.cc/W29T-STGP]).

19

1965 U.S.C.C.A.N. at 2085; Davoli, supra note 4 at 169; Edwards, supra note 18.

20

1965 U.S.C.C.A.N. at 2085; Davoli, supra note 4 at 169; Edwards, supra note 18.

21

Davoli, supra note 4 at 163, 169-70.

22

Walid Fakhoury & Stefan Priebe, Deinstitutionalization and Reinstitutionalization: Major Changes in the Provision of Mental Healthcare, 6 Psychiatry 313 (2007).

23

James W. Trent, Moral Treatment, Disability Hist. Museum (Oct. 23, 2016).

24

Clarke, supra note 15 at 465-467.

25

Id.

26

Id.

27

Id. at 465.

28

See Trent, supra note 23.

29

Leon Eisenberg, Were We All Asleep at the Switch? A Personal Reminiscence of Psychiatry from 1940 to 2010, 122 Acta Psychiatrica Scandanavica, 89, 96 (2010).

30

See Clarke, supra note 16 at 462; Fahkoury & Priebe, supra note 22 at 313.

31

Clarke, supra note 15 at 468; see also Davoli, supra note 4 at 168-69; Fahkoury & Priebe, supra note 22 at 313.

32

Fahkoury & Priebe, supra note 22 at 313.

33

Clarke, supra note 15 at 466.

34

Clarke, supra note 15 at 466-67.

35

Fahkoury & Priebe, supra note 22 at 313.

36

Id.

37

Legal Action Center, The Medicaid IMD Exclusion: An Overview and Opportunities for Reform, Legal Action Center, .

38

Jennen, supra note 2 at 346.

39

Id. at 346 (citing 42 U.S.C. § 1396d(a) (1988)).

40

La Couture, supra note 3.

41

Jennen, supra note 2 at 346-47.

42

Davoli, supra note 4 at 169.

43

Clarke, supra note 15 at 465-67.

44

Id. at 468.

45

Id.

46

What is Psychiatric disability and Mental Illness?, BU Cent. Psychiatric Rehab., https://cpr.bu.edu/resources/reasonable-accommodations/what-is-psychiatric-disability-and-mental-illness [].

47

See Torrey et al., supra note 1 at 101.

48

Alison Knopf, Medicaid Projects Set to Evaluate IMD-Exclusion Alternatives, 34 Behav. Healthcare 32, 33 (2014).

49

Davoli, supra note 4 at 170.

50

Id.

51

Peter Cunningham et al., The Struggle to Provide Community-Based Care to Low-Income People with Serious Mental Illness, 25 Health Aff. 694, 696 (May/Jun. 2006).

52

Doris A. Fuller et. al., Going, Going, Gone: Trends and Consequences of Eliminating State Psychiatric Beds 1, 3 (2016).

53

Brian M. Rosenthal, ‘Boarding’ Mentally Ill Becoming Epidemic in State, The Seattle Times (Apr. 2, 2015), .

54

Davoli, supra note 4 at 170-71.

55

Hyeyoung Lim, Finding Explanations on the Growth of Mass Incarceration and the Reductions in Crime: Incapacity or Total Threat?, 33 (Aug. 2008) (unpublished Ph.D. dissertation, Sam Houston State University) (on file with Sam Houston State University) (quoting Treatment Advocacy Ctr., Briefing Paper: Repeal of the Institutions for Mental Disease Exclusion, available at http://www.psychlaws.org/HospitalClosure/Repeal.htm []).

56

La Couture, supra note 3.

57

Jennen, supra note 2 at 346. Although the IMD-defining “overall character” provision was not added to the language of the Medicaid Act until 1988, HHS has long-used the following criteria to determining whether a facility qualified as an institute of mental disease:

The facility is licensed as a psychiatric facility for the care and treatment of individuals with mental diseases;

The facility advertises or holds itself out as a facility for the care and treatment of individuals with mental diseases;

The facility is accredited as a psychiatric facility by the JCAH [Joint Commission on Accreditation of Hospitals];

The facility specializes in providing psychiatric/psychological care and treatment. This may be ascertained through review of patients' records. It may also be indicated by the fact that an unusually large proportion of the staff has specialized psychiatric/psychological training or by the fact that a large proportion of the patients are receiving psychopharmacological drugs;

The facility is under the jurisdiction of the State's mental health authority;

More than 50 percent of all the patients in the facility have mental diseases which require inpatient treatment according to the patients' medical records;

A large proportion of the patients in the facility have been transferred from a State mental institution for continuing treatment of their mental disorders;

Independent Professional Review teams report a preponderance of mental illness in the diagnoses of the patients in the facility (42 C.F.R. 456.1);

The average patient age is significantly lower than that of a typical nursing home;

Part or all of the facility consists of locked wards. Id.

58

Id.; see also Davoli, supra note 4 at 172.

59

Jennen, supra note 2 at 369.

60

Id.

61

Id.

62

Davoli, supra note 4 at 174.

63

Id.

64

Id.

65

Id. at 173.

66

Davoli, supra note 4 at 175.

67

Samuel E. Simon et al., Mental Disorders Among Non-Elderly Nursing Home Residents, 25 J. of Aging & Soc. Pol'y 58, 68 (Jan. 2011).

68

Id.

69

Tatyana Gurvich & Janet A. Cunningham, Appropriate Use of Psychotropic Drugs in Nursing Homes, 61 Am. Fam. Physician 1437-1446 (2000).

70

Id.

71

Id.

72

Emma Sandoe, What Is the IMD Exclusion Everyone Is Talking About?, Harv. L.: Bill of Health, (Feb. 27, 2016), http://blogs.harvard.edu/billofhealth/2016/02/27/what-is-the-imd-exclusion-that-everyone-is-talking-about/ [].

73

Mat DeLillo, Institution for Mental Disease (IMD) as an “In Lieu of” Service, Milliman: Insight (May 18, 2016), http://us.milliman.com/insight/2016/Institution-for-Mental-Disease-IMD-as-an-in-lieu-of-service/ []; see also La Couture, supra note 3.

74

Chicago Sun-Times, ‘Devastating’ Closure of Mental Health Centers to Hit 10,000 Patients Next Month, Chicago Sun-Times (Jun. 24, 2016), http://chicago.suntimes.com/news/devastating-closure-of-mental-health-centers-to-hit-10000-patients-next-month/ [https://perma.cc/FAE5-NDAS]; see also Kristin Fawcett, What Happens to Patients When Mental Health Centers Close?, USA Today (Sep. 20, 2014), http://health.usnews.com/health-news/patient-advice/articles/2014/09/30/what-happens-to-patients-when-mental-health-clinics-close [].

75

Kenneth Lovett & Larry McShane, Deborah Danner, Schizophrenic Bronx Woman Killed by NYPD, Wrote Essay on Cops' Inability to Deal with Mentally Ill, N.Y. Daily News (Oct. 20, 2016), http://www.nydailynews.com/new-york/bronx/bronx-woman-killed-nypd-wrote-essay-cops-mentally-ill-article-1.2838291; Eli Rosenberg & Ashley Southall, In Quick Response, de Blasio Calls Fatal Shooting of Mentally Ill Woman ‘Unacceptable’, N.Y. Times (Oct. 19, 2016), .

76

See Lovett and McShane, supra note 75.

77

Shaun King, The Killing of 66-Year-Old Deborah Danner is Wrong on Every Level, N.Y. Daily News (October 19, 2016), .

78

See Rosenberg & Southall, supra note 75.

79

Andy Mai et al., Deranged Woman, 66, Shot Dead After Attacking Cop with Baseball Bat in Bronx; NYPD Probing Why Police Officer Used Gun Over Taser, N.Y. Daily News (Oct. 19, 2016), .

80

Graham Rayman et al., NYPD Sergeant Charged with Murder in Fatal Shooting of Deborah Danner in the Bronx, N.Y. Daily News (May 31, 2017), .

81

John Parry, Criminal Mental Health and Disability Law 23 (2009).

82

See infra Figure 1, originally published in The Economist, (Aug. 3, 2013), .

83

Caitlin Klevorick, Our Unhealthy View of Mental Health (and Mental Illness), The Huffington Post (Mar. 2, 2013), http://www.huffingtonpost.com/caitlin-klevorick/our-unhealthy-view-ofmen_b_2797892.html [].

84

Risdon N. Slate et al., The Criminalization of Mental Illness 42 (2d ed.) (2013).

85

See Parry, supra note 81 at 23.

86

See Mental Illness and Homelessness, Nat'l Coal. for the Homeless, http://www.nationalhomeless.org/factsheets/Mental_Illness.html []; Council of State Governments, Criminal Justice/Mental Health Consensus Project 8 (2002).

87

How Many People with Serious Mental Illness Are Homeless?, Treatment Advocacy Ctr. (Apr. 2, 2016), http://www.treatmentadvocacycenter.org/fixing-the-system/features-and-news/2596-how-many-people-with-serious-mental-illness-are-homeless [].

88

Id.

89

Benjamin G. Druss et al., Trends in Mental Health and Substance Abuse Services at The Nation's Community Health Centers, 96 Am. J. Pub. Health 1779, 1781 (2006).

90

See Slate et al., supra note 84 at 42.

91

Id.

92

Chris Koyanagi & Judge David L. Bazelon Center for Mental Health Law, Learning from History: Deinstitutionalization of People with Mental Illness as a Precursor to Long-Term Care Reform, The Henry J. Kaiser Fam. Found. (Jul. 31, 2007), .

93

See Parry, supra note 81 at 26. The court's findings above are particularly striking because they simultaneously reveal the deficiencies in the overall condition of mentally ill people caused by the IMD Exclusion and deinstitutionalization and show the additional harms they perpetuate. A dearth in adequate, community-based treatment centers, combined with the closure of state hospitals, left many to struggle to adjust to society at large without the proper means to. Unwilling to adjust their own biases, “mentally healthy” (in very general terms) citizens work to constructively expel the mentally ill from their communities. Such tactics include barring community treatment centers from entering their neighborhoods, a measure which would undoubtedly help patients manage their illness better. Instances like the one described by the federal court exemplify the kind of perpetual cycle of denial of healthcare that is devastating to people with mental disorders, especially as they cope with living outside of an inpatient care setting.

94

Harry Richard Lamb et al., Mentally Ill Persons in the Criminal Justice System, 75 Psychiatric Q. 107, 111 (2004).

95

Id.

96

E.B., What ‘Broken Windows' Policing Is, The Economist (Jan. 27, 2015), .

97

George L. Kellin & James Q. Wilson, Broken Windows: The Police and Neighborhood Safety, The Atlantic (Mar. 1982), https://www.theatlantic.com/magazine/archive/1982/03/broken-windows/304465/ [].

98

See Lamb, supra note 94 at 112. See also Matt Vogel et al., Mental Illness and the Criminal Justice System, 8 Soc. Compass 627, 630 (2014).

99

See Lamb, supra note 94 at 112; see also, Richard Lamb & Robert W. Grant, The Mentally Ill in an Urban County Jail, 39 Archives of Gen. Psych. 17, 20 (1982).

100

Ron Honberg & Darcy Gruttadaro, Flawed Mental Health Policies and the Tragedy of Criminalization, 67 Corrections Today 22, 22 (2005).

101

See Vogel et al., supra note 98 at 630.

102

Matthew Epperson, Opinion: Where Police Violence Encounters Mental Illness, N.Y. Times (Jan. 13, 2016), https://www.nytimes.com/2016/01/13/opinion/where-police-violence-encounters-mental-illness.html (quoting 2015 Washington Post Database of Police Shootings, The Wash. Post (Last visited Apr. 2, 2017), ).

103

Id.

104

Doris J. James & Lauren E. Glaze, Mental Health Problems of Prison and Jail Inmates 1, Bureau Just. Stat. (2006).

105

Melissa Reuland et al., Law Enforcement Responses to People with Mental Illnesses: A Guide to Research-Informed Policy and Practice 8, Council of State Gov'ts Just. Ctr. (2009).

106

Incarceration & Homelessness: A Revolving Door of Risk, 2 A Quarterly Rev. Nat'l HCH Council 1, 1 (Nov. 2013).

107

National Association of State Mental Health Program Directors, Position Statement on Repeal of the Medicaid IMD Exclusion, Nat'l Ass'n of State Mental Health Prog. Dirs., https://www.nasmhpd.org/content/position-statement-repeal-medicaid-imd-exclusion [].

108

The House Introduces Bipartisan Legislation to Repeal IMD Exclusion, Addiction Pol'y Forum (Jun. 23, 2017), .

109

Gary Enos, Waivers or repeal? Uncertainty Reigns Over Future of IMD Exclusion, 29 Alcoholism & Drug Abuse Weekly 6, 7 (Nov. 20, 2017).

110

Peter Sullivan, New Hope for Mental Health Reform, The Hill (Mar. 4, 2016), http://thehill.com/policy/healthcare/271714-new-hope-for-mental-health-reform [].

111

La Couture, supra note 3

112

Enos, supra note 109 at 7.

113

La Couture, supra note 3.

114

Why Do Drug Use Disorders Often Co-Occur with Other Mental Illnesses?, Nat'l Inst. on Drug Abuse (Last visited on Jan. 4, 2018), https://www.drugabuse.gov/publications/research-reports/comorbidity-addiction-other-mental-illnesses/why-do-drug-use-disorders-often-co-occur-other-men [].

115

Dual Diagnosis, Nat'l Alliance on Mental Illness, https://www.nami.org/Learn-More/Mental-Health-Conditions/Related-Conditions/Dual-Diagnosis [] (citing the 2014 National Survey and Drug Use and Health published by the SAMHSA).

116

For a list of the HHS “overall character” factors, see Jennen, supra note 2.

117

Marybeth Musmeci, Key Themes in Medicaid Section 1115 Behavioral Health Waivers, The Henry J. Kaiser Fam. Found., (Nov. 10, 2017), https://www.kff.org/report-section/key-themes-in-medicaid-section-1115-behavioral-health-waivers-issue-brief-9118/ [].

118

About Section 1115 Demonstrations, Medicaid.gov, https://www.medicaid.gov/medicaid/section-1115-demo/about-1115/index.html [].

119

Julia Zur & Marybeth Musmeci, Medicaid's Role in Financing Behavioral Health Services for Low-Income Individuals, The Henry J. Kaiser Fam. Found. (Jun. 29, 2017), https://www.kff.org/medicaid/issue-brief/medicaids-role-in-financing-behavioral-health-services-for-low-income-individuals/ [].

120

About Section 1115 Demonstrations, supra note 118.

121

Musmeci, supra note 117.

122

Id.

123

Ctrs. for Medicare & Medicaid Services, Letter Approving Massachusetts' Section 1115 Waiver Demonstration Proposal, Table C (2017).

124

Manatt on Medicaid: 10 Trends to Watch in 2016, Manatt, Phelps & Phillips, LLP (Jan. 2017) (unpublished report) (on file with author), https://www.jdsupra.com/legalnews/manatt-on-medicaid-10-trends-to-watch-86181/ [].

125

Behavioral Health Treatment and Services, Substance Abuse & Mental Health Servs. Admin., https://www.samhsa.gov/treatment []. (“Medications for mental and substance use disorders provide significant relief for many people and help manage symptoms to the point where people can use other strategies to pursue recovery.”)

126

Sean Eckhardt, Rehabilitating Former Prisoners Starts with Affordable Housing, TakePart (Nov. 9, 2016), .

127

See generally, Jocelyn Fontaine, The Role of Supportive Housing in Successful Reentry Outcomes for Disabled Prisoners, 15 Cityscape 53 (2013).

128

Phuong Le, Addiction, Mental Illness Complicate Help for the Homeless, HeraldNet, (Dec. 27, 2017), .